Checkup 2

Question 1

Government has “_____ _____” on the earnings of a business.

Answer 1

prior claim

Question 2

Since 1952, the average age of stockholders has _________.

Answer 2

declined

Question 3

Earnings paid to stockholders are called ________.

Answer 3

dividends

Question 4

Earnings remaining after paying creditors and taxes do not need to be paid to _________.

Answer 4

stockholders

Question 5

_________ stock is the stock most desired by investors.

Answer 5

Common

Question 6

channels shares to investors

Answer 6

stockbroker

Question 7

corporate owner

Answer 7

stockholder

Question 8

evidence of ownership

Answer 8

stock certificate

Question 9

facilitates buying and selling

Answer 9

stock exchange

Question 10

“fixed” claim on earnings

Answer 10

preferred stock

Question 11

Corporation boards of directors are elected by ______________.

Answer 11

stockholders

Question 12

Annual reports of corporations can usually be found in ________ or _______ libraries.

Answer 12

college; city

Question 13

A corporation _______ be productive without laborers.

Answer 13

cannot

Question 14

Owners have a residual _______ on earnings.

Answer 14

claim

Question 15

To allow earnings to remain in the business is a primary means of _________ the activities of a business.

Answer 15

financing

Question 16

Three claimants of the earnings of a business are _________, ________, and ________.

Answer 16

creditors; government; owners

Question 17

Holders of _________ stock have a prior claim on earnings over __________ stock holders.

Answer 17

preferred; common

Question 18

If a corporation’s earnings increase, _________ on common stock may increase.

Answer 18

dividends

Question 19

The usual functions of a board of directors are to ____________________________________________ and ________________________________________.

Answer 19

to determine the general policies of the firm; to participate in the hiring of the top-ranking officers.

Question 20

On the average since 1952, _______ people are investing in corporate stock.

Answer 20

more